The European Union faced a series of daunting challenges as 2009 opened. At the top of the list—and the most urgent—was how to respond to the global economic crisis. How would a union of 27 states, comprising the stronger economies of its Western member countries and the poorer former communist states that were more recent entrants, forge a coherent strategy? Should the union back the U.K.’s calls for a massive global fiscal stimulus of the kind championed by the United States or sit tight and resist higher borrowing in an attempt to ride out the recession?

Baroness Ashton, the new European Union high representative for foreign affairs and security …

John Thys—AFP/Getty Images

Dark clouds also hung over the EU project itself as the year began. The bloc’s drive to reform its own institutions so they could perform better with an enlarged membership of 27 remained in deep trouble. The EU’s Lisbon Treaty—the product of eight years of painstaking work—had been drawn up with the intention of pooling more powers at the European level, in part by creating the new posts of EU president and a more powerful foreign policy chief and by reducing the right of one country to veto the wishes of the rest. The idea was that if Europe could speak as one, rather than as 27, it would be far better able to punch its weight in global negotiations, whether on trade and the economy, foreign affairs, or the environment. Yet some member states were determined not to back the deal, arguing that too much power was being transferred from national governments to Europe.

It was just these kinds of concerns that had led Ireland to reject the treaty in a referendum in June 2008. Countries such as the Czech Republic were also showing a reluctance to sign up. If just one of the 27 states refused to agree, the treaty would be dead. Somehow, Ireland had to be persuaded to vote again, and the other doubters had to be won round.

There were also divisions over plans to expand the community farther eastward by admitting new member states in years to come. The question of whether Turkey should win admission continued to split the union.

Moreover, rather than forge a spirit of unity, the economic crisis opened deep divisions. By early February the Czechs, who held the rotating presidency of the EU for the first six months of 2009, had become involved in a damaging spat with France, which Czech leaders accused of having pushed protectionist policies to help its own car industry at the very time Europe should have been acting together as one. French Pres. Nicolas Sarkozy responded to the economic downturn by criticizing French car companies that relocated plants to Eastern European countries in an effort to cut costs, and these countries cried foul. Czech Prime Minister Mirek Topolanek accused Sarkozy of having adopted “beggar thy neighbour” policies to protect France’s interests. It seemed that the economic difficulties were forcing some countries to look to their national interests, not the broader European one. Would Europe’s entire single market fracture under the pressure?

The arguments spilled over into discussions of whether the EU should back big fiscal stimulus packages or keep a tight rein on borrowing. In late March, Topolanek described the U.S. and U.K. approach, which favoured pumping in huge sums of money to keep the world economy afloat, as “the road to hell.” U.K. Prime Minister Gordon Brown, on the other hand, said that he believed that “global leaders recognize the need to cooperate.” In the end, as so often happened in Europe, it was left for countries to agree to disagree and to launch their own fiscal stimulus packages if they so desired.

In June the EU staged elections to the increasingly powerful, but still fledgling, European Parliament. Centre-right parties enjoyed the greatest success, and in July conservative former Polish prime minister Jerzy Buzek was elected the body’s president. Centre-left parties in power in countries such as the U.K., Spain, and Portugal took a battering in the June elections because they were blamed for the economic downturn. Disillusion with the European Union, and politicians in general, was evident in a turnout of just 43% of the 388 million eligible voters. Most alarming was the success of far-right parties, which took advantage of rising nationalist sentiment and suspicion of remote government. In the U.K. the political establishment was shaken when the openly antiforeigner British National Party seized two seats in the European Parliament. It was the first time that the party had ever gained a foothold in Europe’s emerging legislative assembly. Far-right parties also increased their votes dramatically in several other countries, including Austria, The Netherlands, Hungary, Denmark, and Finland. It was another alarming sign that the people of Europe were splintering off from a political elite intent on centralizing its power base at a European level.

By early summer, however, the EU was renewing its enthusiasm to drive forward with political integration and expansion. Turkey expressed its continued eagerness to join the union, although its bid met with intense resistance from countries such as Austria and France. Both Albania and Iceland formally applied for EU membership in 2009. Iceland had long stood aloof from the EU, believing it could thrive on its own, but the economic crisis that had ravaged its banking system left it feeling vulnerable. Carl Bildt, foreign minister of Sweden, which had assumed the presidency of the EU in June, welcomed Iceland’s newfound community spirit. The country’s existing level of economic integration with the rest of Europe, Bildt said, would allow it to be placed on a “shorter track” for membership than states that were economically and politically less prepared, such as countries in the Balkans.

Meanwhile, the bloc’s leaders tried to reinvigorate the union’s stalled reform process. They agreed to measures designed to make the Lisbon Treaty more acceptable to the Irish. New guarantees ensured that Ireland would retain its military neutrality and the right to determine its own taxes and policies on issues such as abortion. Ireland held a second referendum in October, and this time Irish voters backed the treaty by 67.1% to 32.9%—a swing of 20.5% to the “yes” camp since the summer of 2008. Most European leaders were elated. Within days, Polish Pres. Lech Kaczynski signed the treaty. The only country left to put its name to Lisbon was the Czech Republic. Eventually, after receiving some further guarantees for his country, Czech Pres. Vaclav Klaus, a strong Euroskeptic, reluctantly ratified the treaty in November.

There was no time for self-congratulation, however, since arguments had already begun over who should fill the top posts created under the Lisbon Treaty, particularly that of first permanent president of the European Council. Although the role was not clearly defined in the treaty, it was obvious that it would carry huge power and prestige. The occupant would represent the EU in global meetings and serve as the face of Europe. For weeks there was discussion about whether Tony Blair, the former U.K. prime minister, should be given the role. Many member states, however, objected to Blair, mainly because of his support for the war in Iraq and the U.K.’s failure to adopt the euro during his tenure as prime minister. At a summit in late October, it became clear that even France and Germany—the “big two” of the EU—had profound doubts about Blair. Other names were floated, but as agreement proved elusive, the decision was postponed to another meeting in mid-November.

In the end the matter was resolved without the expected drama. Blair was rejected by EU leaders in favour of Belgian Prime Minister Herman Van Rompuy. Rather than opting for a world-renowned figure who would have overshadowed the 27 EU heads of government, the decision was made to appoint a low-key figure, an effective organizer who was little known outside Belgium—and who was uncontroversial. The appointment of British Baroness Ashton, the EU trade commissioner, as the first high representative for foreign affairs and security policy was also something of an anticlimax. Ashton, while respected, was pretty much unheard of outside the U.K.’s Labour Party and the European Commission, on which she had served for a little over a year. In deciding on these appointments, the EU had shown, however, that it was pressing ahead after an eight-year struggle to modernize. The Lisbon Treaty came into force on December 1.

At the union’s summit in late October, EU leaders had also struggled to agree on a negotiating mandate for the UN climate-change talks to be held in December in Copenhagen to decide on a successor to the Kyoto Protocol, which was due to expire in 2012. There was disagreement over how much the richer Western countries should pay to poorer ones to help them clean up their environments. Danish Prime Minister Lars Løkke Rasmussen said that the EU would contribute “a huge amount of money” if other richer countries played their part. Poorer Eastern European states that had recently joined the EU, however, were uneasy about committing funds to help other countries. “We don’t want a situation where Romania or Bulgaria is going to pay Brazil to mitigate carbon dioxide emissions, because it is absurd,” said Mikolaj Dowgielewicz, Poland’s minister for Europe.

The year ended in disappointment when world leaders gathering for the climate-change talks failed to agree to legally binding targets to cut greenhouse-gas emissions. The EU had taken a lead role in pushing for firm commitments backed by international law and had set its sights on a deal that would have committed countries to a 30% cut in emissions, compared with 1990 levels, by 2020. When a deal finally came, much of the detail was struck by the U.S. and China, and this left an impression that the EU had been bypassed. The accord contained aspirations to cut emissions and finance measures to mitigate the effects of climate change in poorer countries—but there was nothing legally binding. While some form of unity was achieved after two weeks of haggling, the accord fell far short of the EU’s hopes and showed that in China it had an increasingly powerful force to confront in global affairs.